Competitive Forces Marketing Strategy - 1287 Words

Competitive Forces: Five Forces Analysis The five forces analysis shows that lululemon is confronted by moderate or low competitive forces. 1. Buyer Bargaining Power: This threat is very weak because lululemon sells directly to consumers, who rarely have haggling prices or other terms with sellers. Lululemon rarely sells wholesale, and when they do it is to support their grassroots marketing strategy to increase brand awareness. Although buyers could switch to a competitive brand, they would not receive the same psychological satisfaction of social status shown through clothing as they gain from buying products from lululemon. This and the fact that the brand’s reputation is important to buyers show that lululemon’s product ‘delivers quality or performance that is not matched by other brands.’ This superior quality and reputation drive the demand, creating the â€Å"lululemon cult phenomenon.† Lululemon also does a great job of combating any consumer bargaining gained through information on products by providing information on their trademarked fabric and technology, health, yoga, and upcoming lululemon activities on their website. 2. Substitute Products: This is a low threat because substitute products such as shorts, tank tops, or other clothing not meant for a physical lifestyle do not fit the needs of the target consumer lululemon strives for. The buyers’ psychological need to show social status and an appearance of a healthy lifestyle. 3. Supplier Bargaining Power: ThisShow MoreRelatedIntro to Marketing Tesc Assignment 11428 Words   |  6 PagesTESC Introduction to Marketing Written Assignment 1 Choose a specific industry (e.g., grocery retailing, the airline industry, etc.), and apply Porter s Five Forces Model to discuss that industry s competitive forces and their relative influence. Michael E. Porter, a renowned business strategist, identified five competitive forces that influence planning strategies that businesses use. The model, called Porter’s Five Forces was later updated to include the impact that the internetRead MoreStopping Five Forces Analysis On Decision Making1688 Words   |  7 Pagescommunities on their travel time to Scarlet Hospital. They will evaluate a possible value of five forces analysis on decision-making that will aid with some answers. The value to balance Scarlet Hospital to reinforce its defensive marketing strategy. 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These are the threat of entry of new competitors, the threat of substitutes, the bargaining power of buyers and of suppliers and the rivalry between the existing competitors. Where these forces are intense, below-average industry performance can be expected; where these forces are mild, superior performance is